Yushu, China ? China completed the first orderly transfer of power in its modern history on Sunday when Jiang Zemin surprised the nation by turning over his final important position, as chief of the military, to President Hu Jintao, who can now claim to be the undisputed leader of the world’s most populous country.

The announcement that Jiang, 78, was stepping down as chairman of the Communist Party’s Central Military Commission came at the end of a party meeting where top personnel decisions are often made. But his departure was not signaled publicly in advance, leaving China watchers to wonder until the last moment whether the country was about to break ground in its political development or perhaps was sliding toward a power struggle between Jiang and the 61-year-old Hu.

From a Western perspective, the smooth transition signals to the world community, including investors, that China understands the need to guarantee stability. Jiang’s most important legacy, besides stewarding the growth of the economy, has been to preside over a predictable, collective leadership that has not let political intrigue overshadow economic reforms.

Until Jiang’s retirement, which cleared the way for the fourth generation of leaders since the 1949 revolution, every change at the top came at great cost to national stability and to the careers and lives of the most powerful.

Mao won a war. Deng Xiaoping took control in the aftermath of the toppling of the Gang of Four. And Jiang was plucked from seeming anonymity in 1989 as a result of the Tiananmen massacre. In the decades in between, political purges did in numerous top party men.

The ascension of Hu was markedly different. He took over from Jiang as president and party chief in November 2002. And while Jiang held onto what was arguably the most powerful position as military chief, the promise had been held out that China was trying to regularize and professionalize politics the way it was building its economy to international standards.

All it took was a commitment by the old men at the top to stand aside, which was no small task in a one-party state where the most powerful make the rules. Jiang’s second in command, Zhu Rongji, eagerly headed for retirement in 2002, but Jiang harbored ambitions to join party immortals like Mao and Deng.

In China’s closed political system, where the important decisions are made behind closed doors without a free press to keep tabs on officials, there was no way to know if Jiang intended all along to retire Sunday, whether he was pushed, turned down entreaties to stay or made the decision for other reasons, such as his health. Rumors involving all those, including unsubstantiated reports that Jiang has serious health problems, have been circulating.

In the official announcement, none of this backroom talk was addressed. The official Xinhua news agency reported that Hu succeeded Jiang as head of the military and that the two men appeared together Sunday at a meeting, where they shook hands cordially, “triggering an outburst of loud applause from all present.” In what was described as a short, emotional speech, Jiang offered his thanks, while Hu paid homage to Jiang’s “outstanding contribution to the party, the state and the nation.”

The more important words were provided by Jiang, in a letter that Xinhua said was dated Sept. 1 in which he requested permission to resign.

Hu is “absolutely qualified,” and the fourth generation of leadership “can stand the test of reform, opening-up and complicated” situations, he wrote, adding that it was important to uphold the party’s leadership over the military.